A lesson about markets: “I will buy your monkeys”

This is probably an ancient story, now widely circulating around the Internet.  It’s a powerful tale, very appropriate for today.

Once upon a time in a village, a man appeared and announced to the 

villagers that he would buy monkeys for Rs. 10/-

The villagers seeing that there were many monkeys around, went out to the 

forest and started catching them.

The man bought thousands at Rs. 10/- and as supply started to diminish, 

the villagers stopped their effort. He further announced that he would now 

buy at Rs. 20/- This renewed the efforts of the villagers and they started 

catching monkeys again.

Soon the supply diminished even further and people started going back to 

their farms. The OFFER rate increased to Rs. 25/- and the supply of 

monkeys became so little that it was an effort to even see a monkey,

let alone catch it!

The man now announced that he would buy monkeys at Rs50! However, since he 

had to go to the city on some business, his assistant would now buy on 

behalf of him.

In the absence of the man, the assistant told the villagers. Look at all 

these monkeys in the big cage that the man has collected. I will sell them 

to you at Rs35 and when the man returns from the city, you can sell it to 

him for Rs. 50/-

The villagers squeezed up with all their savings and bought all the 

monkeys.

Then they never saw the man nor his assistant, only monkeys 

everywhere!!!

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